- Constellation closed its US$26.6 billion (including debt) acquisition of Calpine from Energy Capital Partners on Jan. 7, 2026.
- The merger combines Constellations nuclear fleet with Calpines natural gas and geothermal assets to form the largest U.S. power generator at roughly 55 GW.
- Approvals from FERC and key state regulators were obtained, with DOJ-required divestitures of certain plants to address antitrust concerns.
- Consideration included about 50 million Constellation shares, roughly US$4.5 billion cash, and assumption of about US$12.7 billion net debt, implying ~7.9 2026 EV/EBITDA.
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The Constellation acquisition of Calpine represents a major consolidation move in the U.S. power sector, combining nuclear, natural gas, geothermal, and clean energy assets into a more vertically and geographically diversified platform. For Constellation, this means de-risking fuel exposure (adding gas/geothermal to its nuclear base), expanding its presence in high-growth demand states (Texas, California, New York), and scaling its customer solutions business coast-to-coast.
The transaction’s price—US$26.6 billion on an EV basis—along with an estimated 7.9× 2026 EV/EBITDA multiple, suggests Constellation is paying a robust valuation consistent with projected energy demand growth. Key synergies likely include operational scale benefits, improved load/fuel/geographic diversity, and complementary generation profiles that can smooth supply risk (nuclear 24/7 base, gas for peaks, geothermal for steady low emissions).
Regulatory risk was substantial, but appears to have been managed pre-emptively. Approvals from key state and federal bodies were secured leading up to closing. DOJ’s requirement to divest several power plants—in Pennsylvania, Texas, and Mid-Atlantic—mitigates concerns in tight power markets and competitive grids (e.g. PJM, ERCOT). The divestitures may reduce some scale, but likely do not undermine the core strategic value of the transaction given geographic dispersion.
Investment banking/legal advisory teams played major roles: Latham & Watkins advised Calpine and Energy Capital Partners; Lazard, J.P. Morgan, Evercore, Morgan Stanley, Goldman Sachs, Barclays also involved. For ECP, this marks one of the largest private equity exits in recent years in the utilities/power sector.
Open questions remain: ability of Constellation to integrate Calpine’s gas and geothermal assets with its nuclear‐centric governance/operations; impact of fluctuations in natural gas prices; how divested assets will affect alignment of capacity with demand in critical grid regions; and whether projected free cash flow and growth in new clean tech (battery storage, advanced nuclear, carbon capture) will meet forecasts under regulatory and market risk.
Supporting Notes
- The closing date was January 7, 2026, when Constellation completed its acquisition of Calpine from ECP.
- The deal value is approx. US$26.6 billion including debt; equity purchase ~$16.4 billion, ~$4.5 billion cash, and assumption of ~$12.7 billion net debt.
- The expanded generation fleet offers around 55 gigawatts of capacity combining nuclear, natural gas, geothermal and zero/low-emission sources.
- Regulatory approvals obtained from FERC, NY PSC, Texas PUC; DOJ required divestiture of specific plants: York 2 (PA), Jack Fusco (TX), minority stake in Gregory (TX), and others in Mid-Atlantic.
- Transaction multiple ~7.9× 2026 EV/EBITDA.
- Key advisory firms: Latham & Watkins (legal for Calpine & ECP); Lazard and J.P. Morgan (financial for Constellation); Evercore, Morgan Stanley, Goldman Sachs, Barclays on Calpine/ECP side.